City
Q
P
I
A
Psub
Pop
1
32.92
1.89
32.4
4.38
2.08
98.7
2
28.51
1.94
29.9
4.12
2.06
104.5
3
33.94
1.99
29.1
5.06
2.15
105.1
4
33.45
2.04
28.6
5.36
2.18
106.9
5
35.68
2.09
30.2
5.38
2.18
108.9
6
29.01
1.89
31.4
3.47
1.99
115.2
7
30.68
1.94
30.3
4.06
2.05
117.8
8
43.14
1.99
30.4
5.29
2.17
120.2
9
20.84
2.04
28.6
3.39
1.98
120.8
10
31.27
2.09
26.3
5.12
2.16
122.7
11
35.45
1.89
26.5
4.44
2.09
122.9
12
32.14
1.94
29.5
4.18
2.06
124.6
13
43.02
1.99
29.1
5.57
2.2
125.8
14
34.73
2.04
31.2
3.57
2
131.9
15
43.14
2.09
23.8
6.43
2.39
133.1
16
33.17
1.89
28.8
3.95
2.04
135.6
17
41.59
1.94
29.3
4.04
2.05
136.5
18
32.1
1.99
27.4
4.36
2.08
141.8
19
45.74
2.04
27.8
5.81
2.23
144.8
20
35.92
2.09
30.2
4.63
2.11
150.1
Suppose we decide to charge a per ounce price of
$2, while at the same time our rival charges a
price of $2.15. All else equal, what would
you expect sales to be? How confident are you in your
forecast? Explain.
2. Suppose we are charging a price of $2 and
our current marginal cost is $1.50 Are we
maximizing profits at this price? If not, should we raise or
lower price? Why?